Tritax Big Box REIT PLC (LON:BBOX) told the market it expects strong trading throughout 2020, building on an impressive update in August.
Tritax Big Box said it expects growth this year as the value of its warehouse portfolio increased in 2019 due to growth in the large logistics asset market.
Colin Godfrey, CEO of Fund Management, said:
“The market for very large, big-box logistics assets continues to exhibit strong fundamentals in 2020 and over the long term. Structural tailwinds are driving the increase in the size of logistics assets1 to further increase productivity, reduce costs, and streamline supply chains.
After a largely static 2019 affected by Brexit and general election uncertainty, we think sectoral yields could see further compression this year. Investment amounts are likely to increase as international investors and financial institutions continue to reweight their portfolios. The difference in yield between all real estate and 10-year Gilts is nearly 400 bps. ”
The property investment company announced that its portfolio to 31 December was valued at £3.94 billion, a notable increase from £3.42 billion in 2018.
In June, six months into 2019, the portfolio value was £3.85m, and the company’s value has increased by 1.8% in real terms over the course of 2019.
Tritax Big Box added that it is targeting a total dividend of 6.7p for 2019. Shareholders will be happy with this as they have seen progress throughout the year.
In the first nine months of 2019, the company paid out a total of 5.025p, but to the delight of shareholders, Tritax Big Box said it intended to pursue a progressive dividend policy throughout 2020.
Tritax said it had committed debt financing of £1.7bn, of which £1.2bn had been borrowed at the end of December, adding that 87% of committed debt was financed on an unsecured basis. Ta.
Godfrey concluded:
“More than 10 million square feet of rental property is reported to be available and carried over from 2019, and tenant acceptance looks promising in 2020. Speculative supply is down slightly from 2018. But importantly, demand continues to outstrip supply, with buildings over 500,000 square feet down by about 50%. We therefore expect attractive levels of rental growth to continue, which, when combined with 53% of our contracted rental income receiving fixed or minimal increases, supports the Group’s progressive dividend policy .
Following our acquisition of db symmetry (rebranded to Tritax Symmetry), development assets accounted for around 11% of our GAV and we now control one of the UK’s largest logistics land banks, offering an attractive We offer opportunities for internal growth at high yields. Our primary focus in 2020 will be on delivering value to our shareholders through internal pre-let development, which will be primarily funded by the recycling of proceeds from the sale of certain investment assets, and which Disposal plans for the year are already underway. . We continue to identify opportunities to add further value through the acquisition of new investment assets and advance development funding. ”
Tritax Big Box build from August
In August, the company announced to investors that operating profit before fair value changes in the first half of 2019 rose 5.7% year-on-year to £60.7m.
The company’s portfolio value also increased by 12.6% year-on-year to £3.85bn, with rents also increasing by 3.5% to £166.8m.
Notably, the company announced a dividend of 3.425 pence per share (up 2.2% year-on-year) for the same period. Similarly, adjusted EPS rose slightly, increasing by 0.9% to 3.41 p.a.
Tritax Big Box’s six-month total return was down 4.68 points to 0.42%, and EPRA’s net asset value per share was down 1.8% to 150.08p.
“The long-term fundamentals of our market are positive, with consumers switching from the high street to online purchases, creating continued demand for logistics space to fulfill these orders, and the sector continues to benefit from structural changes in shopping habits.”
The Tritax Big Box REIT share price is trading at 139p (-0.29%). 3/2/20 12:02BST.
